I am working with a turnkey provider and found a single family house (3 bed 2 bath) in Hueytown with numbers that makes sense. The house is bit dated; it appears to me that the turnkey provider bought at 100K, made minimal repairs and now selling at $165K. The rent would be $1295 and the cash ROI 8.5% ($291). The neighborhood comps seems reasonable and accurate, but I am worried about "negative equity" that I read so much about on BP. It's hard to grasp how you can go from $100K to $165 with such a basic cosmetic repairs.
My main concern, however, is that I know nothing about the neighborhood. I am told that the A B C D area ratings are very subjective and unreliable. I do not know what Hueytown overall rating is. I would really like to get a better idea what I am getting myself into. From what I understand, Hueytown is a small suburban city near Bessemer. Bessemer appears to be one of the most rough and dangerous cities in America. Is this true? So hard to determine from the web search. Also, the Birmingham is an hour away, which is too far for commuters.
Does anyone has experience with this neighborhood? Any advice to the first timer would be greatly appreciated.
I know it can be difficult to research a market from a distance, but Hueytown is not one hour from Birmingham...it will typically take 15-20 minutes to get from downtown Hueytown to downtown Birmingham, and that's pretty much the normal for those of us that live and work around Birmingham and drive everyday to and from work...no matter which side of town you live on, we're all roughly within 30 minutes or less from being downtown, including Hueytown. This makes Hueytown a suburb of Birmingham...not Bessemer. Don't worry so much about Bessemer. It has it's problems, but they typically don't drift over into Hueytown. We have MUCH bigger problems with the eastern parts of town now than we do the western areas...Centerpoint mainly.
I've owned several homes over the years in Hueytown. I actually just tried to buy another one a few weeks ago on the courthouse steps (but these big rental companies have deeper pockets than I do). We've got a rental right next door in Pleasant Grove for $1,100/mo and it is NICE. We paid $27k for it 4 years ago and spent a little over $75k gutting and renovating it. I say all that to make a point...yours should be top of the market perfect to command $1295. They may have told you it's been rented for that number for awhile, but either ask to speak directly with the tenant, or ask to see corresponding deposits into an account where the tenant has actually paid that amount for the past six months. If they let you speak directly with the tenant (which they probably won't), have a defined list of questions that you want honest answers to ready for them. Offer to send the tenant a $100 Amazon card for their time...it might just save you $40k in the long run.
Now, on to the price of the house. They probably realistically did pay $100k for the house. I just watched that one on the courthouse steps sell for $105k a few weeks ago ($20k more than my last bid), so that seems to be the going rate out there now to buy a light renovation job, then spend $20k - $25k in repairs.
I personally think you can find a better deal than that. Spending $165k is towards the top end of Hueytown now, although it may not be 2 years from now...who knows. But $165k today can take you to a better side of town with better schools, and better tenants. Think Leeds, Moody, Odenville, McCalla, Warrior, Jasper, Pell City, Calera, etc...It sounds like you live out of state anyway, so you probably wouldn't care if it's a few more miles in the country away from downtown. We're not a big public transportation hub down here in the south, so everyone has cars and we drive everywhere...living a few more miles away from town, is just not as big of deal as it is in other parts of the country.
With all that being said though, if you can buy it for $130k....it's probably worth it.
Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes
5y
This may be a weird suggestion but I would actually call the neighbors. Go to zillow and collect the addresses nearby the homes. Then go to the county auditor real estate website and find the owner. Then use fastpeoplesearch and call some folks.
There are many shady turnkey providers out there so be careful! Message me if you need anything!
I recently closed on a property in Hueytown. From what I understand, bessemer is big and parts of it are rough. Hueytown is probably better. There is big Amazon warehouse south of Hueytown which is driving some of the investment in that area (promise of new jobs).
I would suggest you call a few local property managers and get a feel of the area. The "negative equity" is definitely one of the reason why I haven't been able to find a good turnkey deal yet. FWIW, my investment is 3 bed, 1bath and I got it for $105k. I am expecting it to rent for $900-$1000.
Investor · Birmingham, AL · Member since 2016 · 315 posts · 206 votes
5y
@Tatjana Roth
I have been in Hueytown for 10 years. Great community. Multi generation stay home in Hueytown. Great schools. They built a new and large high school there about 10 years ago.
Great police department. I had a tenant have their lawn mower stolen and the police brought the lawnmower back 2 days later. I have talked to utility workers and postal workers and they all say Hueytown is a great place. These guys are on the street every day. Good luck. Hoses are cheap. You can rent 3 bedrooms 1 bath all day long. Hope this help. Good luck.
The school is close Hueytown elementary. I generally look at the crime data from realtor.com and that neighborhood is mapped in very light color (low crime). Would love to know how that maps based on your experience
I recently closed on a property in Hueytown. From what I understand, bessemer is big and parts of it are rough. Hueytown is probably better. There is big Amazon warehouse south of Hueytown which is driving some of the investment in that area (promise of new jobs).
I would suggest you call a few local property managers and get a feel of the area. The "negative equity" is definitely one of the reason why I haven't been able to find a good turnkey deal yet. FWIW, my investment is 3 bed, 1bath and I got it for $105k. I am expecting it to rent for $900-$1000.
Congratulations on your purchase! I couldn’t find anything within the $100k price range. I researched the area, there’s also Mercedes production facility nearby. Another good factor. Proximity to Bessemer worries me though.
Thanks, John. Good to know. You mentioned that you believe that the $1300+ rental is very difficult to sustain in the neighborhood? I was told the house has been already rented and that I took only two weeks.
I know it can be difficult to research a market from a distance, but Hueytown is not one hour from Birmingham...it will typically take 15-20 minutes to get from downtown Hueytown to downtown Birmingham, and that's pretty much the normal for those of us that live and work around Birmingham and drive everyday to and from work...no matter which side of town you live on, we're all roughly within 30 minutes or less from being downtown, including Hueytown. This makes Hueytown a suburb of Birmingham...not Bessemer. Don't worry so much about Bessemer. It has it's problems, but they typically don't drift over into Hueytown. We have MUCH bigger problems with the eastern parts of town now than we do the western areas...Centerpoint mainly.
I've owned several homes over the years in Hueytown. I actually just tried to buy another one a few weeks ago on the courthouse steps (but these big rental companies have deeper pockets than I do). We've got a rental right next door in Pleasant Grove for $1,100/mo and it is NICE. We paid $27k for it 4 years ago and spent a little over $75k gutting and renovating it. I say all that to make a point...yours should be top of the market perfect to command $1295. They may have told you it's been rented for that number for awhile, but either ask to speak directly with the tenant, or ask to see corresponding deposits into an account where the tenant has actually paid that amount for the past six months. If they let you speak directly with the tenant (which they probably won't), have a defined list of questions that you want honest answers to ready for them. Offer to send the tenant a $100 Amazon card for their time...it might just save you $40k in the long run.
Now, on to the price of the house. They probably realistically did pay $100k for the house. I just watched that one on the courthouse steps sell for $105k a few weeks ago ($20k more than my last bid), so that seems to be the going rate out there now to buy a light renovation job, then spend $20k - $25k in repairs.
I personally think you can find a better deal than that. Spending $165k is towards the top end of Hueytown now, although it may not be 2 years from now...who knows. But $165k today can take you to a better side of town with better schools, and better tenants. Think Leeds, Moody, Odenville, McCalla, Warrior, Jasper, Pell City, Calera, etc...It sounds like you live out of state anyway, so you probably wouldn't care if it's a few more miles in the country away from downtown. We're not a big public transportation hub down here in the south, so everyone has cars and we drive everywhere...living a few more miles away from town, is just not as big of deal as it is in other parts of the country.
With all that being said though, if you can buy it for $130k....it's probably worth it.
Investor · Leander, TX · Member since 2016 · 296 posts · 402 votes
5y
I’ve been there for over a year currently at $999 rent, rented first week on the market, tenant renewing for another year at $1,049 , never late on the rent. It’s near the country club and golf course and good school. I’m happy.
@Jay Compton, @John Patton I have been hearing negative view on Center Point. Curious to know what exactly is going on there? Especially since lot of neighborhoods are revitalizing fast near Birmingham IMO.
Rental Property Investor · Newark, CA · Member since 2021 · 10 posts · 9 votes
5y
Hi all,
Jumping into this conversation as there seems to be a wealth of information. I'm also a new investor and been doing research on various areas to invest in.
@Manas M. - Congrats on closing your property in Hueytown! Is this you're first property?
@Tatjana Roth - I've recently started listening to The Birmingham Real Estate Investor podcast and they provide great information on various areas/submarkets.
My research so far has lead me to focusing my efforts in Hueytown/Pleasant Grove and Forestdale/Adamsville. Seems like Hueytown has already been discussed on this tread. But any insights into the Forestdale/Adamsville areas?
Real Estate Broker · Birmingham, AL · Member since 2019 · 326 posts · 203 votes
5y
While Hueytown sometimes gets put down, we’ve got several reasons to feel hopeful about its future prospects. The 35023 zip code possesses a higher owner-occupant rate compared to many other neighborhoods in the city- this can help lead to higher sale prices and values. We also like the employment picture- Hueytown isn’t far from the Mercedes Benz plant in Vance, and just down the road from Bessemer, which has the new Amazon fulfillment center- both bringing in relatively well-paying jobs, economic activity, and rental demand.
